Investors poured a record £3.1 billion ($3.92 billion) into British equity funds in November, marking a sharp reversal following October’s outflows, according to Calastone, a leading global funds network.
This renewed interest came in the wake of the UK government‘s autumn budget statement.
The surge in investment followed significant withdrawals in October, driven by anticipation of the Labour government’s first budget.
Concerns over a widely expected rise in capital gains tax prompted many to pull their funds, Calastone noted.
In addition to the rebound in equity funds, UK-focused funds saw inflows of £317 million last month. This marks the first positive shift since May 2021, highlighting a tentative return of confidence among domestic investors.
“Nearly half of October’s outflows were reinvested into equity funds within the first week of November,” said Edward Glyn, Calastone’s Head of Global Markets. “This underscores that the record-breaking activity was largely motivated by efforts to minimise tax liabilities.”
Despite the recent uptick, Glyn cautioned that the UK stock market remains out of favour with many investors.
“There is no immediate catalyst likely to spark a broader resurgence of interest in this underappreciated market,” he added.
